Resource shares, banks undercut FTSE 100

Tullow Oil bucks trend as shares jump after Kenya well update

LONDON (MarketWatch) — Most U.K. stocks dropped as losses for resource firms weighed on the main London equities index Tuesday, while banks tracked European peers lower amid renewed political concerns about Greece.

The FTSE 100 index (UKX) tumbled 1.8% to 5,554.55, with selling accelerating into the close.

Do earnings surprises matter?

(3:34)

As far as the quarter’s earnings reports go, the luster of earnings surprises seems to be easing.

Tullow Oil PLC (TLW) bucked the trend, rising 3.3% to 15.17 pounds a share, after announcing it has discovered more oil in its Ngamia exploration well in Kenya. Credit Suisse lifted Tullow’s target price to £18.41 from £18.18.

London-listed banks followed their European counterparts lower amid political concerns in Greece, where prospects for forming a coalition government appeared decidedly uncertain.

“It seems unlikely that a new government will be formed this week and new elections — possibly as soon as June — look increasingly likely,” analysts at Danske Bank said in a note.

HSBC Holdings (HSBA)
HBC, +0.08%
also fell, down 1.2%, weakening after having traded mostly in positive territory. The company’s underlying profit in the first quarter was boosted by its investment-banking division and emerging-market operations. Net profit for the quarter came in at $2.58 billion, HSBC reported. Read more on HSBC’s quarterly results.

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